Cheryl Clark, for HealthLeaders Media , November 26, 2013

Hospitals are being hit hard with a "dramatic increase" in records requests and audits from Medicare Recovery Audit Contractors, with a 28% increase in complex denials in the third quarter of this year compared with the first.

Auditors sought to review medical records documenting more than $10 billion in Medicare payments from 2010 to Sept. 30, 2013, of which $2.5 billion was denied. And of those RAC investigations that resulted in a denial of payment, hospitals appealed 47%, with a 67% success rate in getting the decision overturned.

Those are among several findings from the latest quarterly installment of RACTrac, the American Hospital Association's member survey of RAC experiences since 2010. This installment covers the third quarter of 2013 ending Sept. 30. Reports from more than 2,000 hospitals are included, 1,269 of which reported during the third quarter.

"The data show that RACs continue to demonstrate a high level of inaccuracy when reviewing claims, which means that hospitals must spend funds that could be used for patient care in order to appeal inappropriate denials," says Melissa Jackson, senior associate director of policy for the AHA.

An "Immense Administrative Burden" on HospitalsJackson says the RAC program "requires fundamental reform so that hospitals can avoid this immense administrative burden and focus on their mission to provide patient care."

RAC audits are the U.S. Department of Health and Human Services effort to scrutinize hospitals' billed claims to correct

Over payments

Under payments

Inappropriately coded claims

The audits also seek to find cause to cancel payments for services deemed unreasonable, unnecessary or duplicative. The auditor program was created by the Medicare Modernization Act of 2003 and was officially launched in 2005.

Slow Response to AppealsAmong the survey's findings was that 94% of hospitals that appealed claims reported delays beyond the statutory 90-day-limit for a determination by an administrative law judge on whether the payment was appropriate.

Among the AHA's other survey findings:

Cumulative medical record requests have increased by 13% since the first quarter of 2013.

58% of medical records reviewed by RACs "did not contain an overpayment."

67% of hospitals indicated medical necessity denials were the most costly complex denials.

71% of all appealed claims are still sitting in the appeals process.

64% of short-stay denials for medical necessity were because the care was provided in the wrong setting, not because the care was medically unnecessary.

43% of participating hospitals reported having a RAC denial reversed through utilization of the discussion period.

70% of all hospitals filing a RAC appeal during the third quarter of 2013 reported appealing short-stay medically unnecessary denials.

Audits Costly for HospitalsDealing with a RAC audit involves hospital expense, the survey showed. About 12% of hospitals responding said they spent more than $100,000 managing the RAC process, and 49% spent more than $25,000.

More than three-fourths of all hospitals, including teaching and non-teaching, rural, urban, and critical access hospitals were audited during the survey period, beginning in 2010. Through the third quarter of 2013, smaller and rural hospitals were slightly less likely than others to receive audits.

The survey revealed wide variation in RAC activity by region, with the greatest number of hospitals reporting audits located in the southern and southeastern part of the country, from West Virginia and Virginia, Louisiana, Oklahoma and Colorado to the Mexican border.

The most commonly cited reason for complex denials was a medically unnecessary short stay in a hospital. Of short-stay denials for medical necessity, 64% were because care was provided in the wrong setting, "not because the care was medically unnecessary," the AHA reported.

U.S. President Barack Obama talks about the Affordable Care Act in the Brady Press Briefing Room at the White House in Washington, November

(Reuters) - The U.S. government has issued a proposal that would likely increase risk payments in 2014 to health insurers offering plans on the Obamacare exchanges after the companies complained a recent policy change allowing people to keep their insurance policies had changed the financial equation.

The rule, published on Monday in the Federal Register, lowered the threshold at which risk payments kick in for the sickest health plan members. The government proposed paying insurers 80 percent of claims greater than $45,000 in 2014. Previously the lower limit was $60,000.

There is a 30-day comment period for the proposed rule.

In addition, the government has proposed a state-specific adjustment for risk payments based on how many people in the state extend their current polices, Citibank analyst Carl McDonald explained in a research note.

The exchanges are being created as part of President Barack Obama's healthcare reform law. An estimated 7 million people are expected to sign up.

"Whether good or bad, it's always worth pointing out that most of the publicly traded plans have little existing exposure to the individual market, while the exchange participation of several plans is quite limited in 2014," McDonald wrote.

As an incentive for participating in the exchanges, the insurers were promised certain risk payments for the first three years to help offset uncertainty about the health of participants.

Technology problems on the exchange have slowed enrollment significantly, calling into question whether insurers will get the mix of healthy and sick people on which they had based their premium rates.

When Obama announced a plan about two weeks ago to allow individuals to keep their current plans longer, insurers complained it would remove even more people from the pool of applicants and asked for adjustments to the risk payments.

Monday, November 25, 2013

On December 17, 2013, CMS is hosting a call to provide an overview of the quality reporting provisions in the 2014 Physician Fee Schedule (PFS) final rule (which has not yet been released). The call will provide details on how an eligible professional or group practice can meet the criteria for satisfactory reporting for the 2014 Physician Quality Reporting System (PQRS) incentive and 2016 PQRS payment adjustment (including a discussion of criteria for satisfactory participation under the new qualified clinical data registry option). The call also will provide updates on the Electronic Health Record (EHR) Incentive Program and Physician Compare.

Goals, Priorities, and Strategies

OIG’s goals and priorities reflect the positive changes toward which we strive. Accompanying each priority listed below are illustrative strategies and indicators, as well as examples of OIG’s work to improve HHS programs and ensure the health and safety of the people served by them.

Goal One: Fight Fraud, Waste, and Abuse

Critical to OIG’s mission is fighting fraud, waste, and abuse. We will continue to employ a multi-faceted approach of prevention, detection, and deterrence.

Priority: Identify, investigate, and take action when needed

Strategy. OIG uses data analysis and risk assessments of emerging issues to identify suspected fraud, waste, and abuse and deploy our oversight and enforcement resources. Our investigations result in criminal convictions and penalties, civil settlements, and administrative actions against those who commit fraud. Updates on OIG’s enforcement actions are available on our website. Looking ahead, we will build on successful enforcement models such as the Medicare Fraud Strike Force teams to enhance our enforcement results in other HHS programs. Key focus areas include: Medicare and Medicaid program integrity and waste in HHS programs. We will also continue implementing and refining protocols for self-disclosure of wrongdoing.

Priority: Hold wrongdoers accountable and maximize recovery of public funds

Strategy. OIG partners with the Department of Justice (DOJ) and HHS on Medicare Fraud Strike Force teams and other health care fraud enforcement activities through the Health Care Fraud and Abuse Control (HCFAC) program. On average, the HCFAC program recovers more than $7 for every $1 invested and protects programs through nonmonetary results, such as criminal convictions and exclusions of providers from participation in Federal health care programs. The latest HCFAC results are available in the annual HCFAC Report to Congress. We will continue to pursue all appropriate means to hold fraud perpetrators accountable and to recover stolen or misspent HHS funds. Key focus areas include: identifying and recovering improper payments and utilizing exclusions and referrals for debarment to protect HHS programs and beneficiaries.

Priority: Prevent and deter fraud, waste, and abuse

Strategy. OIG identifies fraud, waste, and abuse vulnerabilities in HHS programs and operations and advises HHS program administrators and policymakers on how tomplement effective safeguards. For example, our recommendations for strengthening HHS program administration and grants management and our grant fraud prevention training for HHS are summarized on our website. We also educate health care providers and provide them tools to help prevent fraud and abuse; these tools are available on our website. Looking ahead, we will apply the lessons we have learned about fraud vulnerabilities and effective prevention to HHS’s new and evolving programs. Key focus areas include: promoting compliance with Federal requirements and resolving noncompliance; advising HHS on key safeguards to prevent fraud, waste, and abuse, and assessing whether providers and suppliers, grantees, and others are qualified to participate in Government programs.

Goal Two: Promote Quality, Safety, and Value

HHS programs touch the lives of all Americans. OIG is committed to promoting quality of care and public safety in those programs and maximizing the value of Federal dollars invested.

Priority: Foster high quality of care

Strategy. OIG will continue to evaluate and recommend improvements to the systems intended to promote quality of care, exemplified by our series of reviews of adverse events (patient harm resulting from medical care), available on our website. We will also investigate and refer for prosecution cases involving abuse or grossly deficient care of Medicare or Medicaid patients. Looking ahead, OIG plans to expand our portfolio of work on quality of care. Key focus areas include: promoting quality of care in nursing facilities and home- and community-based settings, access to and use of preventive care, and quality improvement programs.

Priority: Promote public safety

Strategy. OIG recommends improvements to HHS programs to ensure adequate emergency preparedness and response; to protect the safety of food, drugs, and medical devices (summarized on our website); and to ensure that their grantees (e.g., Head Start and child care providers) meet safety standards. OIG will continue to prioritize fraud investigations that have public safety as well as financial implications and to look for comprehensive solutions. For example, we will continue to investigate prescription drug fraud cases and plan to work with leadership across HHS operating divisions to identify systemic solutions for this problem.Priority: Maximize value by improving efficiency and effectiveness

Strategy. OIG’s findings and recommendations promote efficiency and effectiveness in specific programs and across HHS. We also work to ensure that HHS programs do not overpay for services or products relative to their value in the marketplace―for examples, see our “Spotlight on Bad Bargains.” Looking ahead, OIG also plans to assess programs intended to achieve value through care coordination and new ways of delivering and paying for care, as well as the reliability and integrity of quality, outcomes, and performance data.

Goal Three: Secure the Future

OIG will continue to address program and operational vulnerabilities that affect the long-term health and viability of HHS programs.

Strategy. OIG reviews HHS’s annual financial statement audits and error rate reports. We also conduct targeted reviews to identify improper payments to be recovered and recommend management improvements to systemic weaknesses that contribute to improper payments. For example, our series of hospital audits (available on our website) identified common billing and payment errors and recommended fixes and recoveries of funds that were overbilled to the Government (overpayments). Looking ahead, OIG will continue to prioritize work on billing and payment errors by providers, effective program administration and contract oversight, and inefficiencies that result in wasteful spending.

Priority: Support a high-performing health care system

Strategy. OIG is working to support a high-performing health care system to foster better health outcomes and lower costs. OIG’s efforts include promoting quality, coordination, and efficiency. We provide technical assistance on safeguards to protect new and changing systems and programs from fraud, waste, and abuse. As HHS manages the transition to payments based on value rather than volume, we plan to conduct reviews and recommend changes to maximize overall value, protect program integrity, and foster value and high performance.

Priority: Promote the secure and effective use of data and technology

Strategy. Data and technology promise to drive improvements in health care and human services at lower costs. OIG will continue to advise program administrators and policymakers on promoting the secure and effective use of data and technology. OIG’s work in this area is summarized on our website. Looking ahead, key focus areas include: the accuracy and completeness of program data (e.g., Medicaid data), the privacy and security of personally identifiable information, and the security and integrity of electronic health records.

Goal Four: Advance Excellence and Innovation

OIG strives to advance excellence and innovation in our own organization and operations.

Priority: Recruit, retain, and empower a diverse workforce

Strategy. OIG achieves its mission through its workforce. To identify, understand, and address the challenges facing HHS, we will continue to invest in our workforce by recruiting and retaining talented employees and by maintaining workforce excellence and the highest standards of professional conduct. We will foster a work environment that enhances productivity, innovation, excellence, and employee satisfaction and will cultivate a culture of continuous improvement. More information about careers at OIG is available on our website.

Priority: Leverage leading-edge tools and technology

Strategy. OIG maximizes the returns on our investments by leveraging data analytics and technology to inform our decisions about where to best direct our resources. For example, analysis of Medicare billing patterns has guided our decisions about where to deploy Medicare Fraud Strike Force teams and data analysis helps us to uncover fraud and conspiracies in specific cases, such as those highlighted in our Semiannual Report to Congress. Looking ahead, we will continue to use the best data, analytic tools, and technologies available to maximize the impact of our work.

Priority: Promote leadership, vision, and expertise
Strategy. In an evolving health and human services landscape, OIG focuses on building leadership and expertise to drive positive change. Our multidisciplinary approach affords us a range of tools to develop sound and innovative solutions. More information about OIG’s multidisciplinary workforce is available on our website. As HHS programs, technology, and the environment change, embracing innovation will help us maintain relevance and achieve impact.

Google Helpouts is a new video service by Google that connects individuals seeking help with experts via real time online video. Healthcare providers are using the platform to connect with Patients. Helpouts is built on top of Google’s Hangouts platform and is HIPAA compliant.

Google says it was created to provide “real help from real people in real time.” People who offer help through the service are calledproviders and can be businesses as well as individuals. Providers must pass a screening process in order to qualify as Helpouts providers.

Once approved, providers create and maintain listings that explain their offerings, qualifications, prices and schedules. Payments are made through Google Wallet and pricing is based either per minute, per session, or free. While Google charges 20% of the fees, health-related providers are not yet being charged. Helpouts Providers can be rated at the end of a session by the user.

Google Helpouts’ health providers include those helping with mental health counseling, speech impediments, carpal tunnel and breastfeeding. One Medical Group, a concierge medical practice, is also a provider. Google Ventures led a $30 million funding round for One Medical Group in March earlier this year. One Medical recommends the service to be used for those with colds, allergies, sinus issues, simple infections, UTI’s, rashes and general advice and consultation.

So far Helpouts is limited to about 1000 providers, but Google is accepting requests for invitation.

Medicare Advantage Fact Sheet

Nov 25, 2013

Since the 1970s, Medicare beneficiaries have had the option to receive their Medicare benefits through private health plans, mainly health maintenance organizations (HMOs), as an alternative to the federally administered traditional Medicare program. The Balanced Budget Act (BBA) of 1997 named Medicare’s managed care program “Medicare+Choice” and the Medicare Modernization Act (MMA) of 2003 renamed it “Medicare Advantage.” Medicare payments to plans are projected to total $154 billion in 2014, accounting for 26% of total Medicare spending (CBO May 2013 Medicare Baseline).

Over the past decades, Medicare payment policy for plans has shifted from one that produced savings to one that focused more on expanding access to private plans and providing extra benefits to Medicare private plan enrollees. These policy changes resulted in Medicare paying private plans more per enrollee than the cost of care for beneficiaries in traditional Medicare, on average (MedPAC 2010). The Affordable Care Act (ACA) of 2010 produced another shift in payment policy by reducing federal payments to Medicare Advantage plans over time, bringing them closer to the average costs of care under the traditional Medicare program. It also provided for new bonus payments to plans based on quality ratings, beginning in 2012, and required plans beginning in 2014 to maintain a medical loss ratio of at least 85%, restricting the share of premiums that Medicare Advantage plans can use for administrative expenses and profits.

Medicare Advantage Enrollment

In 2013, the majority of the 52 million people on Medicare are in the traditional Medicare program, with 28% enrolled in a Medicare Advantage plan (Exhibit 1). Since 2004, the number of beneficiaries enrolled in private plans has almost tripled from 5.3 million to 14.4 million in 2013.

Exhibit 1. Total Medicare Private Health Plan Enrollment, 1999-2013

Medicare Advantage enrollment rates vary by state, ranging from 49% in Minnesota to less than 1% in Alaska, and vary within states, by county (Exhibit 2).

Medicare Advantage Plan Types

Medicare contracts with insurers to offer the following different types of health plans:

Local HMOs and PPOs contract with provider networks to deliver Medicare benefits. HMOs account for the majority (65%) of total Medicare Advantage enrollment in 2013; local PPOs, account for 22% of all Medicare Advantage enrollees.

Regional PPOs were established to provide rural beneficiaries greater access to Medicare Advantage plans, and cover entire statewide or multi-state regions. Regional PPOs account for 7% of all Medicare Advantage enrollees in 2013.

Private Fee-for-Service plans (PFFS), as authorized in 1997, were not required to establish networks, but since 2011, have generally been required to do so. PFFS enrollment increased ten-fold from 0.2 million enrollees in 2005 to 2.2 million 2009, but has since declined to 0.4 million enrollees in 2013, or 3% of all Medicare Advantage enrollees.

Special Needs Plans (SNPs), typically HMOs, are restricted to beneficiaries who: (1) are dually eligible for Medicare and Medicaid; (2) live in long-term care institutions (or would otherwise require an institutional level of care); or (3) have certain chronic conditions. Since 2006, the number of SNP enrollees has increased from 0.5 million to 1.6 million enrollees in 2013; enrollment in SNPs for dual eligibles accounts for 82% of total enrollment in SNPs.

Payments To Medicare Private Plans

Medicare pays Medicare Advantage plans a capitated (per enrollee) amount to provide all Part A and B benefits. In addition, Medicare makes a separate payment to plans for providing prescription drug benefits under Medicare Part D. Prior to the BBA of 1997, Medicare paid plans 95% of average traditional Medicare costs in each county because HMOs were thought to be able to provide care more efficiently than could be provided in traditional Medicare. These payments were not adjusted for health status, and HMOs typically enrolled beneficiaries who were healthier than average.

Beginning in the late 1990s, Congress revised the payment formula to attract more plans throughout the country, particularly in rural and certain urban areas. The BBA of 1997 established a payment floor, applicable almost exclusively to rural counties. The Benefits Improvement and Protection Act (BIPA) of 2000 created payment floors for urban areas and increased the floor for rural areas. The MMA of 2003 increased payments across all areas.

Since 2006, Medicare has paid plans under a bidding process. Plans submit “bids” based on estimated costs per enrollee for services covered under Medicare Parts A and B; all bids that meet the necessary requirements are accepted. The bids are compared to benchmark amounts that are set by a formula established in statute and vary by county (or region in the case of regional PPOs). The benchmarks are the maximum amount Medicare will pay a plan in a given area. If a plan’s bid is higher than the benchmark, enrollees pay the difference between the benchmark and the bid in the form of a monthly premium, in addition to the Medicare Part B premium. If the bid is lower than the benchmark, the plan and Medicare split the difference between the bid and the benchmark; the plan’s share is known as a “rebate,” which must be used to provide supplemental benefits to enrollees. Medicare payments to plans are then adjusted based on enrollees’ risk profiles.

The ACA of 2010 revised the methodology for paying plans and reduced the benchmarks. For 2011, benchmarks were frozen at 2010 levels. Reductions in benchmarks will be phased-in over 2 to 6 years between 2012 and 2016. By 2017, when the new benchmarks are fully phased-in, the benchmarks will range from 95% of traditional Medicare costs in the top quartile of counties with relatively high per capita Medicare costs (e.g., Miami-Dade), to 115% of traditional Medicare costs in the bottom quartile of counties with relatively low Medicare costs (e.g., Boise).

Quality-based Bonus Payments. The ACA specified that plans with higher quality ratings would receive bonus payments added to their benchmarks, beginning in 2012. The ACA also reduced rebates for all plans, but allowed plans with higher quality ratings to keep a larger share of the rebate than plans with lower quality ratings. A CMS demonstration was implemented in 2012 that superseded bonuses specified by the ACA, raised the size of the bonus payments, and increased the number of plans that would receive bonus payments, providing an additional $8 billion in bonuses between 2012 and 2014.

Supplemental And Prescription Drug Benefits

Medicare Advantage plans are paid to provide all Medicare benefits. In addition, if they receive rebates, they are required to use these payments to provide additional benefits, such as eyeglasses, or reduce premiums or cost sharing for covered benefits. Medicare Advantage plans are generally required to offer at least one plan that covers the Part D drug benefit. In 2014, 83% of Medicare Advantage plans offer prescription drug coverage, and 50% provide some coverage in the gap (Kaiser Family Foundation, Nov. 2013). All Part D enrollees receive a 50% discount on brand-name drugs in the gap, beginning in 2011. Since 2011, all plans have been required to limit beneficiaries’ out-of-pocket spending to no more than $6,700.

Medicare Advantage Premiums

The average premium for enrollees of Medicare Advantage Prescription Drug plans will be $39 per month in 2014, weighted by 2032 enrollment, if enrollees remain in the same plan. This reflects a 14% increase in premiums from 2013. Premiums were lower for HMOs and regional PPOs than for local PPOs and PFFS plans; we do not know whether cost sharing for individual services has changed and thus do not know to what extent enrollees’ out-of-pocket expenses have changed (Exhibit 3).

Future Issues

Historically, Congress has enacted a number of changes that affect the role of private plans under Medicare, including adding new types of plans to the program, increasing or decreasing Medicare payments to plans, tightening the rules governing the marketing of the plans, and even changing the name of the program (from “Medicare+Choice” to “Medicare Advantage”). The Affordable Care Act of 2010 made a number of changes to the Medicare Advantage program, driven largely by concerns about the payment system and its effect on Medicare spending.

In 2014, Medicare Advantage markets and plans will look much as they did in 2013, in terms of the number of plans available to beneficiaries, although premiums and out-of-pocket limits are projected to rise for current enrollees who do not change plans. Over the longer term, companies offering Medicare Advantage plans may respond to payment changes in several different ways, depending on the circumstances of the company, the location of their plans, their historical commitment to the Medicare market, their ability to leverage efficiencies in the delivery of care to enrollees, and possibly their quality ratings and bonus payments. Decisions made by these firms could have important implications for beneficiaries with respect to their choice of plans, out-of-pocket costs, and access to providers.

Achieving a reasonable balance among multiple goals for the Medicare program—including keeping Medicare fiscally strong, setting adequate payments to private plans, and meeting beneficiaries’ health care needs—will continue to be a critical issue for policymakers in the future.

Thursday, November 21, 2013

New commercial ACO agreement is among most innovative in the nation.

RICHARDSON, Texas and DALLAS, Nov. 12, 2013 /PRNewswire/ --Blue Cross and Blue Shield of Texas (BCBSTX) and Tenet Healthcare Corporation (Tenet) have agreed to collaborate to offer an innovative, statewide accountable care organization (ACO) model to deliver improved, sustainable patient care and help manage costs through Tenet's Integrated Care Networks. The collaboration is planned to be available to BCBSTX PPO commercial patients at any of Tenet's Texas hospitals with an Integrated Care Network beginning Jan. 1, 2015. The agreement may be expanded to include health insurance marketplace patients over the life of the agreement. Tenet's Texas Integrated Care Networks currently include South Texas Care Connect in San Antonio, Physician Performance Network of Houston and the Sierra Providence Physician Performance Network in El Paso.

The statewide ACO is targeted to include healthcare providers from all of Tenet's Texas markets and will advance the future of healthcare by transforming the way physicians coordinate and deliver patient care by reducing unnecessary hospital admissions, readmissions, ER visits and duplication of services for patients with chronic diseases, leading to lower costs.

"This collaboration with Tenet Healthcare reinforces both organizations' commitments to improving the quality and efficiency of healthcare services," said Jack Towsley, Divisional Senior Vice President, Texas Health Care Delivery, BCBSTX. "It also furthers Blue Cross and Blue Shield of Texas' efforts to establish innovative, value-based care delivery models designed to reward healthcare providers for managing costs and quality while realigning the focus from volume of services to the value of services."

"We are proud to partner with Blue Cross and Blue Shield of Texas on this strategic alliance, which represents the many innovative approaches to healthcare delivery that Tenet and Blue Cross and Blue Shield of Texas continue to provide to their communities and customers," said Clint Hailey, Chief Managed Care Officer for Tenet Healthcare. "Tenet has a long history of successful collaborations with physicians and payers, and this arrangement will capitalize on the physician-led organizations that have developed robust clinical programs to improve care delivery across the service continuum."

"In addition to shifting the way we have traditionally paid for services, the ACO model will allow us to use our time and resources to implement strategies to improve the overall patient experience," says Dr. Dan McCoy, Chief Medical Officer, BCBSTX. "Establishing this arrangement with Tenet will help BCBSTX to provide our members with both lower costs and improved quality of care."

This new model of healthcare delivery is designed to improve outcomes in three key categories: quality of care, patient experience and satisfaction and cost efficiency. It will reach those goals by pursuing the following strategies:

Early identification of disease and illness through effective management and coordination of patient care;

Use of advanced technology and support services to make more informed decisions and facilitate the patient and provider relationship and transitions in care;

Implementing an alternative or non-fee-for-service payment arrangement, and

Lowering cost trends by coordination among payers and providers, without limiting medically necessary services in order to enable the delivery of more affordable healthcare products.

Tenet Healthcare has been advancing the concept of better care coordination for more than a decade. Conifer Health's Value-based Care division will support this ACO project by identifying care improvement, efficiency and service opportunities. As one of the nation's largest employers, this endeavor furthers Tenet's commitment to the long-term health status of its communities.

The Department of Health and Human Services is seeking ways to cut Affordable Care Act spending while still providing quality healthcare to Americans— and a solicitation for bids on the Federal Business Opportunities website reveals that HHS is only willing to spend $7 billion to do so.

The purpose is to develop a Research, Measurement, Assessment, Design, and Analysis (RMADA) IDIQ [Indefinite Delivery, Indefinite Quantity] to respond to expanded needs of the Patient Protection and Affordable Care ACT (ACA) and Health Care reform ACT (HCERA). The work awarded under the RMADA will involve the design, implementation and evaluation of a broad range of research and/or payment and service delivery models to test their potential for reducing expenditures for Medicare, Medicaid, CHIP, and uninsured beneficiaries while maintaining or improving quality of care.

Documents accompanying the solicitation inform possible contractors that the government intends to spend no more than $7 billion over the life of the contract.

The solicitation continues:

The need for analyses based on real time claims and utilization data is a unique factor that distinguishes today’s evaluation of models as opposed to prior demonstrations… Furthermore, because Innovation Center models often include collaboration among multiple payers and other entities, the current evaluation approaches will need to account for the need to gather, coordinate, and analyze private payer and other private data sources. In addition, evaluations involving other entities, such as payers, should plan to examine the role of CMS as a convener and how the model is received by both participating and non-participating affected parties.

Nov. 21 -- MCALLEN -- Three local doctors and their clinic entered into a settlement with the Texas Attorney General's Office to avoid further proceedings tied to the state's action against them for Medicaid fraud. As part of the settlement, Carlos Mego , Pedro Mego , Subbaro Yarra and their clinic, Valley Heart Consultants , will have to pay $5.5 million in a five-installment plan beginning next month. The settlement doesn't affect the doctors' status as medical providers in the Texas Medicaid program, said Thomas Kelley , a spokesman with the AG's Office. The settlement was reached earlier this month, confirming the state's allegations that the cardiology practice improperly billed Medicaid patients for a series of unnecessary tests that were performed by unlicensed technicians and below the required standards of practice. Carlos Mego and Yarra were also named in a similar settlement for $27 million reached with the federal government in 2009 that named five other doctors and South Texas Health System in a scheme that resulted in more than $50 million in Medicare payments, Monitor archives show.

Wednesday, November 20, 2013

Some of the lessons learned from the ICD-10 National Pilot Program include:

•Coders often confused the number “0” (zero) with the letter "O.”

•Coders often confused the number “1” (one) with the letter “l” (L).

•The average accuracy of the coders was 63% based on what was documented from the medical records

•Accuracy was determined based on the answers submitted via the coding response workbook. Answers were determined from matching the answer key to the answers provided by the testing organizations. A grading sheet was used to record the answers provided in comparison to the answer key. Each correct answer was assigned a zero (0) or a one (1) to come up with the % of correct answer.

•Out of the 485 coding submissions from all testing organizations, only 261 submissions by coders of testing organizations included information on time spent coding each medical test case. In addition, the coding process was limited by several variables including logistics.

•Variations in procedure codes were observed due to the expansion of those codes

•Missing procedure codes - occasionally coders coded the diagnosis only but forgot to code the procedures

•Most errors were functional – for example, records not being coded completely or codes being associated with the wrong medical test case numbers.

•Some coders did not specify type of chest pain – what was in the EMR/chart that differentiated it from atypical pains?

•Occasionally coders relied too much on the encoder instead of using their code books—errors occurred when coders went on “auto pilot” mode instead of referring to their code book. This is a problem today that will not necessarily go away with ICD-10.

•Coders should not become so dependent on encoders that they forget when/if there is a need to override.

•Coders were using a non-specific code for a fracture—not allowed in ICD-10-PCS if the diagnostic test results are documented

•Many coders forgot laterality, particularly in the case of pain in a limb; for this diagnosis, four coders out of eight received a zero.

•Coders averaged two medical records per hour, compared to four per hour under ICD-9, which translates to a 50% decline in productivity.

•Coding assignment showed variances which were influenced by hospital policies (ex. Some hospitals coded everything; others coded only what was relevant to the principal diagnosis)

•Logistical issues may have affected the coding time— medical test cases were uploaded into the system right side up but sometimes upside down, and sideways. These limitations and unusual circumstances made it difficult for coders to process the records quickly and therefore could have added to the time it took to code the medical test cases.

•Limitations and challenges include coder conflicts with own work load and personal schedules

•Working with limited resources using only in-kind donations affected the timelines and scope

•Technical/logistical issues in uploading coder responses within the Share Point work book slowed down the testing process

•Testing organizations that were fully electronic (EMR fully implemented) had difficulty coding medical records that were hand written—these groups found little value in documents that were not electronically generated.

Earlier this year, 498 asthma patients in California were split into two test groups. One group puffed their inhalers normally. But the second group was given a sensor that attaches to the top of the inhaler and beams data about their usage back to Dr. Rajan Merchant of Woodland Health Care. Each day, Dr. Merchant scans a list of several hundred patients to find the handful that need to be contacted for an office follow-up.

“Whenever there was a change in patients that require care, we would contact them either on the phone or have them come in,” Merchant told Fast Company. The patients in the control group also received sensors, but neither they nor their doctors were given access to the data. “We would see as them as usual when their symptoms were triggered or for their scheduled appointments.”

Propeller Sensor

This is one of the earliest clinical trials that will show how the so-called Internet of things--a vast array of small but interconnected devices that allow unprecedented levels of communication--could have an impact far more meaningful than automating your home lighting system. The asthma sensor is made by Propeller Health, and it recognizes what type of medication is being used, along with when and where symptoms are triggered. The data is shared with an app that tracks where and when each puff of medicine is discharged, and users can receive weekly updates via text message. It also tracks symptoms, triggers, and location, triangulating them so that you and your doctor can start to see what causes attacks. Are you in a high smog area? Is your bedroom too dusty? Do you use the rescue medication more in September when you’re burning leaves?

When you use the rescue medication it sends a text. 'We see you used your rescue information. We hope you’re okay.'

“The app prompts you for triggers," says Propeller's chief marketing officer Erica St. Angel. "When you use the rescue medication it sends a text, 'We see you used your rescue information. We hope you’re okay--when you’re feeling better, enter your trigger information. Like were you near a cat, was there mold, or was it cold outside?'" Over time that helps patients get smarter about when to take a preemptive puff.

Collecting and analyzing data from multiple individual asthmatics in a community unlocks another layer of potential for Propeller as well. The company partnered with the Weather Channel to monitor the air quality index in cities like Louisville, Kentucky, where they also teamed up with the city to give out free sensors to residents with asthma. “With many more users you can start to overlay other types of geospatial information, pollution, where the parks are, and create really dense and cool maps,” St. Angel says. “In Louisville you start to see time-based information--there is construction on the freeway right now, so asthma attacks are up.”

Around 26 million people suffer from asthma in the United States, according to the Centers for Disease Control (CDC). The annual cost of treating this condition is estimated at $50 billion. It has been calculated that if patient treatment could be better monitored, 80% of all asthma-related hospitalization could be avoided, and the mortality rate from asthma could be reduced by 20%.

Propeller's solution works even for people without smartphones. Through a partnership with Qualcomm Life, the inhaler sensor can be paired with a hub that plugs into the wall and transmits data. Patients using the hub receive an email with updates about their health. Propeller will even mail updates to people without Internet access. "Or we do phone calls," says Propeller CEO and cofounder David Van Sickle. "We have an asthma educator on staff for that reason.”

“I can care less about the technology,” Van Sickle says. “What we care about is improving outcomes to give people more asthma-free days.”

The early results show that the sensor is having a positive effect. Dr. Merchant, who has no financial relationship to Propeller or the foundation funding the study, released the first set of findings last week. Patients using the Propeller sensor on their inhalers had slightly fewer emergency room visits than the control group (0.103 versus 0.141 per person per year), and significantly fewer inpatient days (0.087 per person versus 0.225 among the control group).

Patients being monitored remotely with the Propellor sensors saved nearly $700 compared to the previous year for the same patients.

While that impact may appear to be small, it is measurable when applied to health spending, which is also being tracked historically for the test groups. The patients being monitored remotely with the Propellor sensors were on track to save nearly $700 compared to the previous year. “That was the biggest advantage,” says Merchant. “Both the hospital visits and the costs.”

The Propeller study is still young--this is the first quarter worth of results, and it doesn't wrap up until May of next year--but these are promising early results. And there's built-in incentive for doctors and hospitals to adopt the system. Regulatory changes taking effect in 2014 will, under Medicare's Hospital Readmissions Reduction Program, financially penalize hospitals that readmit patients with the chronic lung disease COPD within 30 days of their original stay. In January, Propeller is introducing a version of their sensor and app made specifically for patients suffering from COPD. “If you go to the hospital for COPD and are discharged but have to come back, there are penalties for the hospital--even if you go home stable,” says St. Angel. “This creates a driver for physicians to use the app to monitor and understand what is going on in the home environment.”

The British government is proposing a new law that could jail doctors and nurses for up to five years, if they are convicted of "willful negligence." The health secretary says the goal would be to prioritize patient safety.

The proposed legislation is part of new proposals meant to address problems revealed by a series of catastrophic failures at a hospital in central England, where hundreds of patients died unnecessarily.

In a speech in the British House of Commons on Tuesday, Health Secretary Jeremy Hunt said there is a need for a "profound transformation" in the culture of the government's free health care system.

But some doctors' groups said such a law would make health professionals defensive and fearful, and that measures already are in place to deal with negligent care.

William Considine, the president and CEO of Akron Children's Hospital moderates the panel discussion Healthcare Careers after the Full Implementation of the Affordable Care Act with panelists Martin Hauser, the CEO of SummaCare, Beverly Bokovitz, the Chief Nursing Officer for the Akron General Medical Center and Charles T. Taylor, the Dean of the College of Pharmacy at NEOMED at the University of Akron Taylor Institute Tuesday. (Karen Schiely/Akron Beacon Journal)

The massive changes happening within the medical industry are creating new job opportunities for people with new types of skills.

That was the message shared by local health-care leaders during a panel discussion Tuesday at the University of Akron.

“I think it’s a wonderful time to be exploring a career in the health-care profession,” Charles T. Taylor, dean of the College of Pharmacy at Northeast Ohio Medical University, said to the group of University of Akron students and faculty.

The discussion, Healthcare Careers after the Implementation of the Affordable Care Act, was part of the University of Akron College of Business Administration’s H. Peter Burg Personal Leadership Development Speaker Series.

The series was created last year to give students an opportunity to learn from local business and community leaders.

The Affordable Care Act, commonly known as Obamacare, is a starting point in the much-needed transition from a health-care system that focuses on “sick care” rather than keeping people healthy, said Martin Hauser, chief executive of SummaCare insurance company.

People with data analysis skills are in demand within the health-care industry as quality becomes increasingly important, Hauser said. “We’ve been hiring lots of people with data and informatics backgrounds.”

Doctors, nurses, patient advocates and other staff members who didn’t used to talk regularly now have daily “huddles” to talk about what is happening in each unit, said William Considine, president and chief executive of Akron Children’s Hospital. “It’s now becoming commonplace.

“The whole concept of team has been redefined in health care.”

Pharmacists have new opportunities to become a more integral part of the health-care team, Taylor said. Pharmacists can use their skills to help patients with medication management and compliance.

“Medications are obviously a key piece of primary care,” he said.

Patient navigators who help those with breast cancer, prostate cancer or other serious illness coordinate all their appointments and care in a move that is becoming more common, said Beverly Bokovitz, Akron General Medical Center’s chief nursing officer.

Advanced practice nurses also are in demand “to take care of families in a more cost-effective, quality way,” Considine said.

Faced with financial challenges, health-care systems are seeking employees with experience in project management or “lean” efforts used by the manufacturing industry to improve efficiency, Hauser said.

Considine acknowledged in an interview after the panel discussion that financially challenging times have resulted in some “right sizing” within the hospital industry.

This fall, Summa Health System and Akron General both laid off workers as part of ongoing efforts to reduce expenses and contend with changes from federal health-care reform. The Cleveland Clinic also recently told employees that staff cuts could be part of the Northeast Ohio health-care giant’s plans to reduce costs by $330 million in 2014.

However, Considine said, hospitals are continuing to hire in new and expanding areas, such as outpatient services.

Tuesday, November 19, 2013

SAN ANTONIO (AP) — One of the largest health care providers in San Antonio has paid nearly $3.7 million to settle Medicare fraud allegations.
Prosecutors on Monday announced the settlement with Baptist Health Systems in a dispute over Medicare reimbursement. A health care provider must disclose that a patient has other insurance when the group files its claim with Medicare.
A whistle-blower lawsuit led to the investigation into allegations that a patient had another insurance policy to cover care at Baptist. The lawsuit also alleged Medicare overpaid Baptist Health Systems on claims from 2003 through 2007.
U.S. Attorney Robert Pittman says Baptist Health Systems cooperated in the review.
The False Claims Act allows a whistle-blower to share in the settlement. Norma Rivera received $661,500, plus Baptist Health Systems paid her legal fees.

Monday, November 18, 2013

On October 23, 2013, the Department of Health and Human Services, Office of Inspector General (“OIG”) published a report entitled “Spinal Devices Supplied by Physician-Owned Distributors: Overview of Prevalence and Use” (the “Report”).1 The Report was provided as a response to Congressional requests to determine the extent to which physician-owned distributorships (PODs) provide spinal devices to hospitals. The Report follows prior OIG review of PODs – specifically, a 2013 Special Fraud Report2 and a Senate Finance Report issued in 2011.3
In its production of the Report, the OIG reviewed 1,000 claims by 615 hospitals billed to Medicare in 2011 that included spinal fusion surgery. Each hospital associated with those claims was asked to complete a questionnaire about its knowledge of PODs. Surgeries from 7 states accounted for just over 50% of the use of PODs devices. The states with the highest reported PODs use were California, Texas, Missouri, Florida, Pennsylvania, Alabama and Georgia (collectively, 52%).
The Report noted that the exact makeup of PODs varies. Specifically, (1) whether physicianinvestors practice in the hospitals to which they distribute the devices, (2) whether the PODs solely distribute devices or both manufacturer and distribute their own devices, and (3) which services the PODs offer with the purchase of the devices. In several instances, the Report noted that the PODs provide physician-investors with the opportunity to profit from their own use of the devices.
PODs have been in the marketplace for more than a decade. An important cornerstone of PODs organizations is the assertion by most PODs that the arrangement can lower healthcare costs because it is a more efficient means of delivering the product to the hospital. That is, fewer “middlemen” or sales personnel equates to lower costs and ultimately savings that are passed on to the consumer. The PODs also create an opportunity to increase competition within the marketplace by allowing smaller manufacturers to compete with larger, international manufacturers. Consistent with prior OIG examinations, the Report was highly critical of these assertions.Notable Findings
Some notable findings from the Report include:

In FY 2011, PODs supplied devices used in almost 20% of the spinal fusion surgeries billed to Medicare.

Surgeries that used POD devices used almost 2 fewer devices per surgery than surgeries that did not use POD devices.

Device costs for surgeries that used POD devices were not lower than those for all other surgeries.

The growth rate of spinal surgery after hospitals began purchasing from PODs was three times that for all hospitals.

The complexity of hospitals’ caseloads of spinal surgeries was slightly higher for hospitals that purchased devices from PODs than that for hospitals that did not purchase from PODs.

Conclusions
Based upon its findings, the OIG reached several conclusions:

The use of PODs is increasing. With a substantial growth rate since 2009, nearly 20% of all Medicare spinal surgeries involved PODs and of the hospital’s surveyed, nearly one-third reported making purchases from PODs. It is clear from the Report that notwithstanding the Special Fraud Alert and extensive concerns raised by the OIG in recent years, that PODs, if not growing, are at least deeply rooted within the spinal surgery marketplace.

PODs do not appear to reduce costs or spinal surgery caseloads. The OIG concluded that hospitals that purchase from PODs perform more spinal surgeries and have slightly more complex caseloads than hospitals that do not purchase from PODs. Though the OIG did not pursue the cause, it did determine that hospitals in its study experienced increased rates of growth in the number of spinal surgeries performed as compared to the growth rate for hospitals overall.

PODs raise significant fraud and abuse concerns. The OIG reiterated its concern that the PODs create significant concerns under the federal Anti-Kickback Statute. As supported by its findings, the OIG noted that devices sold by PODs are “physician preference items” in which the physician’s choice (either of brand or design) may heavily outweigh that of the hospital’s power of choice in selecting (and purchasing) the devices. Though the federal Sunshine Act will require PODs to become more transparent, the Report noted that the disclosure by hospitals and physicians to their patients is widely disparate and the ability of patients to identify potential conflicts of interest among physicians and hospitals is reduced.

Impact
The Report is an example of the OIG’s consistent, multi-year, focused review of PODs. Both hospitals and physicians must carefully consider their current (or prospective) use of PODs in light of the OIG’s findings and conclusions. It is clear that there is tension between the PODs (which many support as a means to reduce overall healthcare costs, while continuing to drive innovation in the marketplace) and the OIG (which does not appear to have become any more willing to accept such claims). Providers can best address the tension and the resulting uncertainty by being vigilant in their compliance efforts, specifically: (1) reviewing current conflicts of interest policies and revising the same as necessary to interface with PODs and (2) reviewing any current PODs to determine their compliance with federal and state laws.

On November 12, 2013, the Office of Inspector General (“OIG”) released Advisory Opinion 13-15 concluding that a proposed arrangement between an anesthesiology group and a hospital-based psychiatry group could potentially generate prohibited remuneration under the federal Anti-Kickback Statute (“Kickback Statute”). The OIG based its conclusion on the fact that the proposed arrangement would not qualify for safe harbor protection and that it presented more than minimal risk under the Kickback Statute because the psychiatry group would receive payment in exchange for referrals to the anesthesiology group.
The proposed arrangement originated from the anesthesiology group’s contract with a hospital as the exclusive provider of anesthesiology services that, in 2012, included a carve out to allow the psychiatry group to provide anesthesiology services to the hospital’s electroconvulsive therapy (“ECT”) patients as well as hire an additional anesthesiologist to provide such services at the psychiatry group’s discretion. Shortly after the carve out was negotiated, the psychiatry group determined that another part-time anesthesiologist was necessary. The psychiatry group proposed that it and the anesthesiology group should enter into a contract whereby the anesthesiology group would provide a part-time anesthesiologist for ECT patients. The psychiatry group would bill and collect for those services and, in turn, would pay the anesthesiology group a fixed, per diem rate for its services. The psychiatry group would retain the difference between the amount collected and the per diem rate.
As an initial matter, the OIG concluded that the per diem compensation would not qualify for protection under the personal services and management contracts safe harbor to the Kickback Statute because (i) the aggregate compensation to be paid over the term of the agreement would not be “set in advance,” and (ii) the safe harbor protects only those payments made by a principal (i.e., the psychiatry group) to an agent (i.e., the anesthesiology group) and, here, the principal would receive compensation from the agent in the form of retaining the difference between the amount billed and collected and the per diem rate.
Additionally, the OIG concluded that the proposed arrangement posed more than a minimal risk under the Kickback Statute for the following reasons:

The proposed arrangement was designed “to permit the psychiatry group to do indirectly what it cannot do directly; that is, to receive compensation, in the form of a portion of the anesthesiology group’s service revenues, in return for the psychiatry group’s referrals of ECT patients to the anesthesiology group.”

The additional anesthesiologist carve out to the 2012 contract between the hospital and the anesthesiology group gave the psychiatry group the ability to solicit remuneration for its ECT patient referrals by allowing the psychiatry group to contract with an anesthesiologist other than the anesthesiology group if the groups were not successful in negotiating the terms of an agreement. The OIG stated that this presents significant risk that the remuneration the anesthesiology group would provide to the psychiatry group, i.e., the opportunity to generate a fee equal to the difference between the amounts the psychiatry group would bill and collect and the per diem amounts, would be in return for the psychiatry group’s referrals to the anesthesiology group.

Importantly, although outside the scope of the opinion, the OIG noted the potential kickback nature underpinning a hospital’s carve out from an exclusive contract. In a footnote, the OIG stated that “[a]though we have not been asked to opine on, and express no opinion regarding, any aspect of [the anesthesiology group’s] relationship with the hospital . . . we cannot exclude the possibility that: (i) the hospital agreed to negotiate for the additional anesthesiologist provision in exchange for, or to reward, the psychiatry group’s continued referral of patients to the hospital for ECT procedures; (ii) the hospital leveraged its control over its large base of anesthesia referrals to induce the anesthesiology group to agree to the additional anesthesiologist provision; and (iii) the anesthesiology group agreed to the additional anesthesiologist provision in exchange for access to the hospital’s stream of anesthesia referrals.”
In light of this opinion, health care providers should carefully consider whether any of their arrangements that otherwise comply with the personal services and management contracts safe harbor involve direct or indirect payments from the agent to the principal as the OIG has stated that such payments are not protected by the safe harbor. Additionally, although only addressed in a footnote, the OIG expressed concern with carve outs to exclusive contracts between hospitals and providers. Providers and hospitals should carefully examine such arrangements for potential Kickback Statute implications.